If recent earnings reports by the biggest banks are any indication, the worse is yet to come. “Six of the biggest lenders all expect heavy credit defaults and soured loans, as shown by their loan loss provisions, which jumped 43% from the already hair-raising totals in the first quarter to a combined $36 billion in the second quarter”1
The COVID-19 Pandemic shuttered businesses earlier this year forcing many to lay-off or furlough workers. The Paycheck Protection Program (PPP) was designed to provide direct incentive to small businesses to keep workers on the payroll. “As of the end of June, the SBA had approved 4.8 million PPP loans totaling $521 billion dollars and representing 51 million jobs. The program currently is set to expire on August 8, 2020 and has $131 billion remaining.”2 While providing much needed relief to small businesses, the program was only designed to give relief in the amount of 2.5 times monthly payroll.
“The number of unemployed fell in June from 21 million to 17.8 million people, but unemployment is still up 12 million people since February.”3 And don’t be misled by the fact losses have barely increased in the past 4 months, that is most likely masked by massive government stimulus spending and PPP loans. Bottomline, a sluggish recovery, alarming unemployment numbers and the fact that many businesses that took PPP loans may still have to lay-off additional workers after the program ends, paints a very bleak picture for the fall—the tidal wave is coming—but we can help..
Convergence Group has taken a leading position in applying marketing principles to the task of collecting. Using sophisticated data analytics, strategic creative, carefully managed selection criteria, and end-to-end program execution, we help collectors hone in on critical motivators that compel action. Rather than serve one party’s need to collect, a marketing orientation focuses on satisfying the other party’s (i.e., the debtor’s) needs. By identifying and leading with those behavioral drivers, collectors can connect with debtors in a whole different way, and generate better results, faster. We’ve helped clients ramp up their collection efforts—and their ROI.
Call us at 302-234-4901 or email us for a free consultation. We can have a customized solution for your business up and running in as quickly as 8 weeks!
- 1 CreditandCollectionNews.com 7/17/20 Report
- 2SBA Paycheck Protection Program Report through 6/30/2020 gov/sites/default/files/2020-07/PPP%20Results%20-%20Sunday%20FINAL.pdf
- 3Bureau of Labor Statistics – June 2020 gov/news.release/pdf/empsit.pdf